A friend of mine holds a senior management position in a large insurance company. She recently applied for a mortgage to buy a house, and wanted income protection insurance. She applied to Suncorp for the insurance because she has banked with them for over 15 years and they provide her current and previous mortgages. She was declined cover because she disclosed that she was seeking treatment for a recent episode of depression.

Her depression is relatively minor and has not caused her to be absent from work. She has informed her manager and mentor at her employer, her mental health is being well managed by an experienced doctor and she is diligently following her treatment plan, which includes a prescription for anti-depressants, an exercise program and counselling. But this is not good enough for Suncorp, and they rejected her application without explanation.

Being an expert in insurance, she asked for an exclusion, which is something specific that is excluded from a policy. She sought an exclusion for depression, which would mean she would be covered if she lost income because she was injured in a car crash, for example, but not covered if she lost income because of absences from work caused by depression. Suncorp wasn’t interested in that either, and rejected the request for an exclusion.

My friend lodged a complaint and an appeal with Suncorp, and told me about it. She’s altogether too nice and too diplomatic for her own good, and I suggested some more proactive measures.

Step 1 was to make a formal discrimination complaint to the Australian Human Rights Commission (HREOC). It is unfortunate to read on the HREOC site that it has dealt with many cases of illegal discrimination against people with mental health issues. The good news is that the mediation and resolution of cases similar to hers have resulted in insurance companies being ordered to provide cover and, in some cases, pay thousands of dollars in compensation.

A set of Guidelines for Providers of Insurance and Superannuation, revised in 2005, clearly states that:

it [is] unlawful for anyone who provides goods, services or facilities to discriminate against a person who has a disability (or is an associate of a person with a disability). This includes provision of insurance and superannuation.

Suncorp has acted in deliberate opposition to the law in discriminating against my friend because of her minor and temporary mental health disability. Subject to forthcoming HREOC mediation, they may have to eventually insure her and perhaps even pay her compensation (which she would probably donate to a mental health charity like Beyond Blue).

One case was resolved like this:

A man who is receiving treatment for a depressive illness complained that he had been refused income protection insurance. The complaint was resolved when the insurer advised that it had re-assessed the application and would provide cover, apologised and agreed to provide $10,000 compensation.

But that’s not good enough for me. I’ve found my kind of vigilante consumer action is quicker and more effective in making amoral corporations account for their actions. I will go further and do what my friend doesn’t feel comfortable doing: publically embarrassing Suncorp and hopefully costing them hundreds of thousands of dollars in potential earnings.

Suncorp’s discriminatory behaviour encourages people not to disclose their mental health status, and perhaps to even not obtain an official diagnosis, which must then be disclosed. The discrimination perpetuated by Suncorp undermines broader social efforts to destigmatise mental health issues and makes it harder for people with mental health problems to maintain their jobs, their homes and their quality of life.

Step 2 was to to ask me to publish her story with the aim of exposing Suncorp’s disgusting discriminatory behaviour. Suncorp don’t deserve your business. If you care about mental health issues and human rights, boycott all of their financial services and tell them why.

Step 3 is to secure a public apology and a statement from Suncorp confirming that it will act lawfully and ethically in future in relation to assessing policy applications from people who disclose mental health issues.

Suncorp insurance discriminates against people with depression

13 thoughts on “Suncorp insurance discriminates against people with depression

  • 28 February 2011 at 12:45 am
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    Really hope she can get that policy, it’s great that you’re helping her out.

    It seems that I’m missing something, though. You mentioned that the insurer rejected her application “without explanation” and then wasn’t interested in offering a policy that specifically excluded depression as a cause for cover. How does she know that the depression was the reason for the rejection?

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    • 28 February 2011 at 7:24 am
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      They said her application was rejected because of her depression but they did not justify why they made that decision.

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  • 28 February 2011 at 1:28 am
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    Interesting story. As a long-term suncorp customer myself I’ll watch any updates to this with interest.

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  • 28 February 2011 at 3:05 pm
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    I can’t claim travel insurance for any issues with my pre-existing medical conditions even though I was born with my disease/disability. Does that mean they are breaking the law?

    I pay more on car insurance than female’s of the same age because somehow I’m more at risk even though I’ve never claimed in my 10 years of driving. Sexist much?

    No disrespect to your friend but that is just a way of life. Insurance companies should be able to, at their discretion decline insurance for people they consider to be higher risk and or raise premiums for certain people.

    It sucks but it is there money to spend how they want. Like any business certain customers are more of a risk than others.

    Anyway good luck with it. Maybe next you can take on the car insurance companies for discriminating against men.

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    • 28 February 2011 at 4:13 pm
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      Mark you make a poor analogy. The exclusion should have been granted and all would have been well. Your issues are different.

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  • 3 March 2011 at 9:46 am
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    G’Day Brian,

    I can totally sympathise with you wanting to help out your mate, but I’d just make a few points on this issue. I’ll apologies in advance if what I put below sounds cold or unfeeling, but I just wanted to put across why I think Suncorp acted the way it did. Upfront to, I’ll note that I do work in insurance (although not in life products).

    I understand that you have knowledge of insurance, but I just wanted to make these general comments before making my main comment. Mark raises a good point about young male drivers and it concerns the difference between a peril/event and a hazard. A peril or event leads to the proximate cause of the insurable loss (Eg. a storm blowing a house over, a car crash, lung cancer). A hazard is a factor that enhances the probability of a loss or increases the probable severity of a loss (eg. you house being made of fibro cement, you live on a flood plain, your car is performance enhanced or you are a smoker). The issue is, an insurer can’t truly exclude a hazard, they can only exclude perils and events. For example, insurers can’t put an exclusion on the age of a driver if they are already insuring them; they can exclude losses arising out of specific risky behaviour (e.g. crashing whilst driving an unroadworthy vehicle), but not the inherently hazardous behaviour of a young male driver. Put another way, an insurer could exclude lung cancer (peril/event), but not all the other consequences of smoking (the hazard).

    The point I’m trying to make here is, from my limited knowledge of life insurance, that depression is both a hazard and a peril. An insurer can exclude loss of income from depression related illness; however, they can’t exclude the possibly increased risk of other events that may arise from depression. I’m not making this up or relying on clichés and stereotypes; Beyondblue had some details on what the increased risk factors from depression involve (ref: http://www.beyondblue.org.au/index.aspx?link_id=89.579). Based on this, depression is not only a direct cause of missing work; it can greatly increase risky behaviour and lead to other proximate causes of injury and income loss.

    I’ve got full sympathy for anyone with any kind of mental illness (including members of my own family and friends); but to put it bluntly, insurers do need to be able to discriminate (in the older and less pejorative sense of the term) between different types of risk to make insurance a profitable business. Before people clamour to decry this apparent corporate greed, insurers need to be able to remain profitable in order to serve their customers and pay back their shareholders and lenders. I recognise that this seems unfair, but if Suncorp has made a decision not to offer cover based on sound, objective underwriting of the risk, then I can also sympathise with them.

    Saying that, though, is Suncorp the only company that she tried to get cover from? APRA has twenty-six life insurers registered with it and it is a very competitive industry. Unfortunately, from speaking to friends who deal in life insurance, my understanding is that not offering life/income protection insurance cover to people that have had treatment for depression is very common. But it must be worthwhile testing the waters with other companies or going to a finance broker or planner to find a company that actually offers the proper coverage (preferably without exclusions) rather than focusing on Suncorp.

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    • 3 March 2011 at 11:07 am
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      As I explained in my story, the irony is that my friend is a senior manager in an insurance company, and it is her professional opinion that there is no underwriting issue requiring Suncorp not to insure in these conditions, especially with an exclusion. Furthermore, Suncorp’s dismissive treatment of her is bad business and makes it appear to be discriminating, regardless of whether its behaviour can be legally defined as discriminatory. The many cases where HREOC has found in favour of complainants against insurance companies suggests that my friend has a legitimate case.

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  • 3 March 2011 at 1:58 pm
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    Fair enough, if Suncorp have treated their customers badly they absolutely deserve to get hammered for it. The only point I’d make is that, although I don’t have the expertise of a life insurance underwriter or actuary (I used to underwrite commercial business), insurers are allowed to discriminate under the Disability Discrimination Act when it’s reasonable in relation to the risk being insured (s. 46 of the act has the full details). As I’ve noted above and notwithstanding your friends experience, the symptoms of depression appear to provide an a priori basis for assuming an increased level of risk and in the form of a hazard rather than a specific peril/event. As noted above, I’d argue that an exclusion would be of limited effectiveness to them.

    Whether that risk in unacceptable to Suncorp is really a commercial choice they’d have to make, but if they are basing it on straight discrimination and no basis in fact and risk, they’re fools and will lose money to companies who do understand what risk is involved (that’s why I reckon your friend should investigate other insurers). I do think, though, that you’ll find this approach is probably not limited to Suncorp. As I said, if they have treated your friend badly, they absolutely deserve to be condemned. I tend to think, though, that the story may be a bit more complicated than simple discrimination.

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    • 5 March 2011 at 11:10 am
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      Hi Smithy, I brought your comments to the attention of my friend, who inspired this post, and she says that your comments are very professional and informed, and it’s fantastic that you’ve generated genuine advice and debate about this complicated topic. She’s going to take your advice and apply for insurance from other providers.

      A major point of this story is about customer service. Suncorp did not explain their reasoning to this potential customer, did not provide information about the insurance industry ombudsman if she wanted to make a complaint, and failed to respond to her written complaint in a timely manner (it’s been 6 weeks and counting).

      Another issue is the inconsistent approach of Suncorp. They lent my friend a large amount of money based on her income and sound financial record, but when she wanted to insure that income they rejected her. I suppose they judge that if she defaults on her mortgage they can sell her house and not lose out, but they may have to actually pay out on a policy. All take and no give. And they wonder why people hate insurance and insurance companies!

      Finally, while I appreciate your comments and your disclosure that you work in insurance Smithy, you really should have disclosed that YOU WORK FOR SUNCORP, and clarified whether you were speaking as an individual or as a company representative. The IP you posted from is that of a Suncorp office in Brisbane. This information alters the context of your comments. You partially defend Suncorp yet also recommend that my friend should take her business elsewhere.

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  • 4 March 2011 at 2:29 pm
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    SUNCORP treats all clients very badly. I paid them all my life and never claimed, the day I had an accident I discovered how they treat you. Do not blindly trust them because they are a bank and the bank staff is nice. The insurance business is a cold cheating machine that only wants to destroy you.
    Do not change from SUNCORP to AAMI it is the same company as well as a very long list of other names.

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  • 8 March 2011 at 12:58 pm
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    Hi Brian

    I hope your friend is able to find the cover she needs and best of luck to her with resolving her health concerns, she seems to be on the right track. You are correct about where I work(in the Melbourne office of a separate division to life) and I was writing in a purely personal capacity. The industry has an unfortunate reputation that is not truly reflective of the full facts or legal background (and hence the reason for my comments), but Suncorp is certainly big enough to get service to its customer’s right and stand up for itself.

    My apologies for not mentioning this earlier, but as you’ll appreciate it creates a whole series of legal and employment practices issues for me if I was identify the company I work for in this sort of online environment. This is especially the case if I am perceived to be involved in conversations on the company’s behalf or if I make detrimental comments about any party. As you’re possibly aware, people have lost their jobs over posting comments about work online and hence my reticence over mentioning it earlier and trying to keep the conversation generic. As the outing of my workplace illustrates, unfortunately the anonymity required to assist in contributing to an informed debate has its limits. This is probably my fault for posting via the work server and a lesson learnt though.

    Background aside, however I would hope that irrelevant of any context, my comments stand on their own merits. For that I’ll have to rely on the judgment of those reading them.

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    • 8 March 2011 at 3:32 pm
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      Thanks Smithy, I appreciate your contribution. I am very concerned about transparency as too many companies now deliberately post fake commentary about themselves to make them look good, hence I regularly check IP numbers.

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